Economy Enters Slow Lane

Witnessing a sustained slowdown over the past few months and steep fall in productions of manufacturing, mining and capital goods, industrial output has plummeted by 5.1 percent. The eurozone crisis and economic downturn in the USA coupled with high interest rate in domestic market are also potent factors which have made Index of Industrial Production (IIP) gloom and doom. Undoubtedly, it was difficult to fend off ripples created by euro crisis and distressed US economy, but the government, had it wanted, could not have let interest rates go through rooftop, which was zoomed out 13 times in the name of containing double-digit inflation. Now, the fall out of surging inflation and high interest rates are adding fuel to the fire of recessionary economy. It is a matter of great concern that not only IIP has registered its dismal performance rather many sectors are also in blues. The falling of rupees, shrinking of foreign investment and the Centre’s hamming and haw on economic reforms are proving triple-whammy for Indian economy when it is already facing headwind of global downturn. At such crucial juncture, it is unlikely that the winter session of the Parliament will tom-tom with passing those bills which could give much-needed impetus to the sluggish economy.

Although the Congress-led government is accountable for pushing the economy to the edge, Finance Minister Pranab Mukherji, who has carved out his image as a saviour of the government in crisis, failed to impress in handling his portfolio and he could not live up to public expectations. Indian economy is known for its robust fundamentals and resiliency, which appeared bullish when the whole world was under the grip of recession, but if it turns bearish in the face of US slowdown and euro crisis, it will reflect sheer inability and lack of vision of the ruling dispensation at the Centre. It is disappointing that happenings on the economic front have stricken dismal note for some time. The government’s roll back on FDI in retail has driven home wrong message. Mere expression for concern on poor shape of economy and slumping of IIP will not be enough, rather some concrete and decisive action is very much needed otherwise economic scenario of the country may jump from frying pan to fire that will gut our dream of India becoming super power.